tv [untitled] November 27, 2012 11:30am-12:00pm EST
low the probability of an uptick in interest rates is a dead certainty the collapse of britain is a dead certainty yes they do allegedly have austerity here and we were one of the big things during the us elections is that obama is a socialist and he's printed more money or incurred more debt than any president in history blah blah blah but they they looked over across the pond and said well david cameron's doing it right quote despite david cameron's talk of austerity he's going to add an estimated seven hundred billion pounds to the national debt in just five years that's more than tony blair and gordon brown added to the national debt in the eleven years it's more than every british government of the past one hundred years put together so again with facts is facts it doesn't matter what the policy is it seems in a debt deflation it all ends up to more debt that's the only way out right and the g.d.p. ratio and skyrocketing. depending on who you ask between seven hundred and nine
hundred percent of g.d.p. so it's very similar to iceland for iceland collapsed money week notes that the only two nations worse than the u.k. are ireland and japan if you add in the private and the banking debts to the national debt what you get is quote our total debt said at more than five times what our entire economy is worth as you said worse than where it was for a lot of nations that have since collapsed right i don't think people in britain understand the us born solution david cameron the coalition solution to the fiscal crash and expand the debt all this talk must already has done nothing but increase the debt so this is again while we're here in london is to witness the collapse of britain just like we were in iceland before and i some collapsed you know this is a great place to watch a country like britain collapse yes and if you want to look at one of the horses.
end of the apocalypse or if you see this man in your town as he said you are. trouble trouble oh. now. you did say in that magazine was i came to london because being here gives you a front row seat of the imminent collapse of an entire city i think that the eurozone is overrated as a disaster area they are not yet in as bad shape as britain the u.k. pound is about to collapse in the collapse of the british economy will be one of the biggest in modern economic history now many on twitter last night when i tweeted about the story and money we were saying well one thing that the money we piece doesn't account for is the g.d.p. are increasing g.d.p. they only know it's increasing debt but that is one of the arguments we heard prior to ireland collapsing or prior to the housing market in california collapsing there is some expansion in g.d.p. g.d.p. is completely flat and it's down significantly from pre-crash so i don't understand
what anybody is smoking if they say that g.d.p. isn't is improving plus the way g.d.p. is calculated of course misstates inflation horribly because i don't kluge food and energy in that calculation so if you include food and energy and the inflation deflator which results in the true g.d.p. number britain would be negative two three four percent right now but was born lies just like in the u.s. you have the office of statistics there lies through their teeth as does os born us morning and an inveterate liar he lies about g.d.p. he lies about the c.p.i. he lies about productivity he's a liar he steals money from the bank of england through the thirty five billion dollar scam stealing money from the rollover of their debts as reported in the press extensively at bank of england trying to not have him steal that money he's a liar he's a thief he steals money and he's a pos tough. so speaking of posh tal flats go to prime minister's questions time from this past week and regarding these three hundred year low yield on u.k.
guilt this is what occurred in parliament yesterday and already i mean it's not the best is that record. seating right there is. a. wonderful friend makes a good point which is because of the fact we have a credible plan to get on top of debt to get on top of deficit to show you how i will pale when the world we have record low interest rates low interest rates which would describe the shadow jones that is the key test of economic credibility this is propaganda from david cameron because more than half of the bonds that the government is selling is bought by the government it's called debt monetization which they don't call that monetization because they put it through the shadow banking system the global slush fund and they say no we didn't monetize that debt it went into the shadow banking system and we don't know who bought that debt wink wink but the u.k. government is buying its own debt so the tory government the coalition government
is setting itself up to being in power during the spectacular crash of the guilty market the bond markets trading in a three hundred year high this is the biggest bubble since the tulip bulb bubble the south sea bubble the mississippi company bubble the nikkei bubble the nasdaq bubble the u.k. gilt bubble is the biggest bubble of them all and it's set to crash right now exactly well record low yields are a sign of apocalypse of the coming paper apocalypse people are terrified of what they're willing to take negative returns and some countries that's not a sign of that they're great stewards of the economy as people are terrified and they also know by the way and then money week article they know and i look at this chart here this is from two thousand and nine the greek government was able to borrow one percent. by two thousand and eleven they're borrowing at one hundred seventeen percent so it could suddenly turn around in a paper apocalyptic situation because the bond market is set to collapse because
it's. the british skill to market the british sovereign bond market is in a three hundred year high bubble bubbles pop the bond market crashes interest rates go to six seven eight percent if you have a tracker rate mortgage you're about to go bankrupt you're about to get a vis aerated you're about to have your guts no doubt by george osborne because it's a line thieving c. word that's what you do your faith is right in the immediate term. and we get to watch right here this is more amusing than the vietnam war used to watch those body bags on t.v. every night with walter cronkite going to watch these homeowners be taken out on stretchers yes now one of the advisors and the financier's of the conservative party of which david cameron and george osborne are members is crispin o'day the financier chris benoit a david cameron is not a leader doesn't understand power and doesn't use it how to use it he said well
look at this financial collapse what you should do with this he says we have got to get the banks working again that means the end of bashing the bankers if there is no credit growth there is no economic growth the last time we were in a depression was the one nine hundred thirty s. and what got us that was cheap money we need a zero interest rate and a housing boom well only explain why the sky. kristie o.d.u. whatever is cooking is crazy that must be a slave name or something that depth is bliss parents couldn't name but the problem is that people don't understand you can have a bubble and sovereign debt because interest rates can't go below zero or so the theory goes and yet six countries in europe right now are offering bonds at less than zero. where you are guaranteed wealth confiscation net negative half a percent or so first to your paper. or we see them switzerland right now so interest rates are actually piercing the zero level and going below zero which is feeding into the surrender your bond bubble so yes your house might have a nominal gain of two or three hundred thousand dollars or pounds i whenever your
entire net worth will be negative rate and you'll be on the on the street without any income whatsoever and having your entire economy shattered so to look at a house price versus the bond paper apocalypse you know it's like all the flooding going on this country people being flooded out of their homes but they're saying well i still have that christmas ornament from five years ago so i'm ok but your house is confluent away now i'm ok i've got the christmas ornament from five years ago so there. you don't understand economics well he is a banker and the bankers are advising the governments around the world and this is part of the problem of why we're getting worse and worse why we're in a debt spiral because you look at this next headline max share traders more reckless than psychopaths study shows this was a study at st galland university in switzerland and what makes individual stock brokers blow billions of financial markets with criminal trading schemes according to a new study conducted at
a swiss university it may be because share traders behave more recklessly and are more manipulative then psychopath so thomas noll one of the researchers the researchers of this study said no actually one can characterize the traders as deranged but for example they behaved more egotistically and were more willing to take risks than a group of psychopath who took the same test and what they found was that the bankers were less interested in this study in actually gaining profit but. they were more interested in destroying their competitors at all costs might well we saw them destroy the housing market was washington destroying the sovereign bond market we're watching them destroy democracy in britain and other countries because they're durang and. the comment that we should not bash bankers is absurd because they're terrorists so i don't understand the deposit why is why is this government hard on terrorists but soft on back interest why do they make why why is there
pathological there is no there there causing more destruction than any tragic religious extremist the city of london is ten times worse than any extremist anywhere in the world and the government has their thumb up their strength giving the blowing them kisses like we love financial terrorism please take me hostage and beat me to death with collateralized debt obligations i'm david cameron and i'm the stupidest frickin leader that this country's ever had he's stupid he's ugly and he's the worst politician the country's never had one how does this guy stay in office another day to do a regime change right of all like well they don't understand that no corresponding country is walking around sleepwalking into a big fiscal bond collapse and bond collapse oh we got a front row seat bring out the body bags who cares by liam actually did say that first by water and then by fire the paper apocalypse is upon us fire strikes fifty five water street i just wanted to note that this is where the same psychopathic
stock brokers traders they hold their shares at the depository trust and clearing corp at fifty five water street which if you recall we covered a few weeks ago several trillion its share certificates were washed away in the floods now it's just been hit by fire this past week and god a spankers dollars bank and bashers why not you. don't you don't you believe in god he hates you chrispin no day. god hates you all right states ermac thanks so much man on the guy's report thank you rex stay tuned for the second half we have steve king in the studio.
more news today vause has once again flared up. these are the images the world has been seeing from the streets of canada. showing up for a shelter all day. i'm max casual come back to the kaiser report time now to turn to steve keen author of debugging economics steve kane welcome to the kaiser report to be a mite lovely to be with you in london i understand you're you've become a stripper i have i have got some of them stripped down you know as the district is here so if we do this in the music. that was my favorite show i like that with rod steiger strips off many more lies and i intend doing this is
a beautiful little to show that i had. been designed by a group in in london called sold mad money it's so i mean to be able to stay stable and are fantastic everything but the paul for the pole dancing. and but stability is destabilising of course this is a theme that runs through your work yeah and that right now we have tremendous stability quote unquote in the bond market people are quite anxious to get into those bonds those are some of those stable but according to man ski and stability fosters instability doesn't so does you know you and i differ on this one i'm going to continue differing alive i don't believe there's going to be a collapse in bonn process of sovereign bonds because fundamentally the reserve banks in every country and the issue of the debt in their own money they can underwrite it which is what they're doing right now if you're signed the buying of a you know pretty much the bonds through that hold until the shadow and buyback
routine and so long as they continue doing that they can effectively set that interest right and keep it there and the reason they conflict the right roger is because if they did the whole rest of the country would collapse as we both know from the incredible level of private which people of course can't get out of in common if you're like in the same way that manipulates over and it right but the flow of funds the flow of money is moving into the antithesis of fixed income and bonds and that would be press. battles yeah and we see the smartest money in the world including the central banks themselves in issuing all this debt for the first time they're buying gold five hundred tons of gold being bought this year that's a forty year high people say well the bond bubble is limited because you can't go below zero on interest rates however we've got six countries now offering rates underneath zero and you've got bob prices at three and four hundred year high so let me ask you a quick question is gold money ok so that are made as a difference yeah if i see it as money and then i have
a point of view you do not see it as money that supports your point of view ok audience to put the comments underneath this what do you think now let's talk about the fiscal cliff we have a wonderful chart about the fiscal cliff tell us about what you're seeing there is my approach true what drives aggregate demand in a market economy we live in a monetary system and it's ridiculous and i've got to say that the conventional economic theory in a classical stuff from paul krugman across to the other extreme they model the world is that there's need the banks nor did it nor money if you can model this system without considering banks state money you know what judges have you been drinking recently but that dominates economic theory and what i say is when you include the banking sector aggregate demand is is income plus the change in debt so what i've got on that shot is what the rise in demand coming out of the huge growth in private debt in america up till about two thousand and nine when it then turned shop way down was anyone from actually maximum two thousand and eight and then
a huge plunge in the edition that did it made the man from being plus four and a half trillion to minus two and a half trillion that's why the huge blunder could they then have come out of it mainly because the government spent and spending about something in the order of two hundred three hundred billion dollars is a deficit to about one and a half trillion and what that government spending did by bit fun and spending it encouraged the private sector to slow down the leverage ng so that's why we bounced up and we now look like one. looks ok in america it's only because the government still spending one of the half trillion dollars in the bad economy above what it rings in tax receipts now if they go the other direction not only would the government contribution go down but the private sector will probably start the leverage again that leads me to my second little child ok this is before we get into it let's go back to the beginning of what you've just saying there is arms and put in the context of you wrote a book called the punk economic and you're saying that traditionally certain things are not included in the modeling of the economy and it goes back to what people's
definition of money is to bring that back again because in your definition of money you include things like debt i include the capacity of the private banking sector to create money by creating that independent of what the central banks rossiter the control them right so that's fundamentally different than what the economist on the page of the new york times while you were when you had that ridiculous slanging match with me on the on the internet at one stage claimed that even though banks carry almost no reserve is that the amount of cash in the economy controls the level of bank lending because when the red a cash dots to run out and that cash is decided by the federal the banks will stop lending but the amount of cash into the system is loaded into existence not just that it's he's actually talking about bank notes here i mean he really was getting desperate to fight against me and i'm going to try to channel you max close to that ok what he tried to say was that if you had the banks the cash to run out what would happen is the the cash manager in a bank would walk up to the lines office and say hey guys were running out of cash
on the i t m's you've got to stop lending and i would say yes and then at the central bank what you have is the employee who manages the i t m's that goes to the governor says governor the items are running out of cash and the government borrowed the banks to stop lending money and my script is a bit like what you'd cite and that is the. manager goes to the lines desk and says stop lending and i say screw you about a good half hour floor and then at the central bank. when the employee goes up until the governor the converting out of money what there's a run on the banks get truckloads of cash down this try to steve king david cameron recently used a foreign policy speech to defend the city of london and the military export industry he argued that it was right for the u.k. to explode fine or jets to saudi arabia because every nation has the right to self defense does every nation of the right to self-defense from weaponized city of london debts this is the thing they're not fighting as you say the major conflict on the planet has got nothing to do with a couple of small terrorist cells in pakistan it's got everything to do with the
impact of the shadow banking system that's what's actually caused this enormous catastrophe around the globe financially and the number of deaths that are flying from that easily going to exceed what happened back on nine eleven so perspective what we focus on them say is wrong and our society is completely skew we have and we have to say that the finance sector wants a gross process where services entrepreneurs and investment it becomes a parasite and we've now got the biggest parasite probably in the history of humanity in this financial system today right so cheap money artificially cheap money promotes malinvestment and in fact that's all these guys know about because they don't have engineers deciding what's a good investment project they're not out there working out whether somebody should you know get funded or send a rocket to through media bring back all that's being done by a independently wealthy capitalist themselves in america that's the sort of stuff banks should be funding but they've done it instead by fund mergers and acquisitions leveraged buyouts mortgage backed securities and all this new. continuous production of derivatives which is
a given this is massive debt overhang without increasing the productive capacity of society and that's why we're in this stench right now right and that actually causes damage and loss of life give a perfect example of new york city the governor new york could have spent something like i think it was five billion flood protection for the city based on the very real estimates of the floods that ninety eight percent of all meteorologists predict. it would occur in the next five years but because rates are so low and because malinvestment is rewarded so heavily it proper investment to protect against a flood is not made and as a result they're paying fifty sixty seventy billion in damages again because of these artificially low interest rates that encourage parasitical behavior and the engineering projects that need to be done the things that are sustainable get pushed to the side because they are not as profitable as flinging artificial money stimulation and weapons of mass financial destruction as warren buffett calls it
and he's right as they always have been saying weapons of mass destruction will potent than anything which was never found in iraq so we we have to say we have to have an intelligent critical view of the finance system and we have to realize the finance system will always want to create more debt because creating debt is the source of them making profits for they're going to try to find some way to conus into more debt and the best way is through ponzi schemes that generate asset bubbles and shares and property and we're living through that again the biggest we've seen on the globe on that front and of course we see over in america they did not until after the bush they're still denying it here before it completely boasts that in our back in my home country but all this rising debt all it's really done it's in flight asset values and when they collapse they goes but the money to will people think they have as well now the new government talking to the cards global problem countries around the world are facing similar problems in japan new governments coming in there saying they want to take away the bank of japan's independence the government wants a completely politicized of the central bank and they want the central bank to
start printing money in new quadrillion yen traunch is they want interest rates to be negative like they are in some countries in europe and they want to get the again crashed again as a way to spur export some folks are saying this is like inviting hyperinflation the crash of the in your thoughts. economists trying to cause inflation is a bit like bush. luna's strong to dive into the ocean they don't know how to do what they've got the wrong technology so they're doing by then be doing for twenty years the bank the central bank of japan actually invented the whole idea of quantitative easing but what a great success that spain inflation rates been about a maximum of one or two percent a normally formed down to be honest one monastery now there's a lot of it was covered because that export thriving export during those twenty years but now those exports are flipped now there are trade balances reversed they spend their importing more than they're exporting they don't have that cushion anymore what about this idea of hyperinflation or currency collapse in japan
a lot of smart people are saying this is the inevitable it'll be the first of the countries to go into currency collapse that's a possibility because when you now admit one of the major reason they could get away with just doing the whole sovereign debt raj to balance out the private sector was because that this huge export surplus exporting into the ponzi scheme of the rest of the world ok but their central bank they can print their own money they can buy back their own debt so why would i have to say at the top of this discussion reset well if they console michael buy back their own debt you have got to tell us what i'm guessing you know you've got a missing us a big currency collapse can happen inflation i concert them causing domestically but a currency collapse which means i've got to pay more for their imports and their exports cost more that is what i could become cheaper if they'd have a currency collapse that that can that can happen particularly if you're looking at a global market think japan is no longer a safe haven but money that goes there to back that currency will flow out the other direction yes i'm going to hot money flows out of the bond bubble into gold he have a global blood clot what about u.k.
somebody under the you've got the central bank capable of underwriting in its own currency that's going to stop the effects of the potential rising rates if we had a totally domestically now not a non-bank system on and on a central bank system then you could get that collapse in bonds people wouldn't trust them interest rates would rise you know as those bonds fall but not when it's backed by the underwriting compatibility of central banks all right steve king well even i've seen improved on your pole dancing. plenty of practice i do another show the show your brother you know i think what it's like to see those packs that's just the australian way is that they have a sort of thing that's a look at that here we go again surfing god. man all right that's all the time we have you can sit out. all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert allen i guess dave keene if you'd like to send me an e-mail please do so at kaiser reported r t t v dot ru. by all.
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